REPUBLIC ACT No. 2023
AN ACT TO PROVIDE THE GENERAL BASIC COOPERATIVE LAW AND TO CONSOLIDATE AND AMEND EXISTING LAWS ON NON-AGRICULTURAL CO-OPERATIVES IN THE PHILIPPINES WITH SPECIAL PROVISIONS FOR GIVEN TYPES OF CO-OPERATIVES.
CHAPTER I
Preliminary ProvisionsSection 1. Short title. This Act shall be known as the "Philippine Non-Agricultural Co-operative Act."
Section 2. Declaration of policy and objectives. It is hereby declared to be the policy of Congress to assist the people to develop their enterprises on a co-operative basis to strengthen their economic independence within the framework of this Act by the promotion of organized methods of industrial production, marketing, distribution and credit, the improvement of processes and other activities and the removal of conditions which hamper the growth of a rising standard of living with a view to promote the general well-being of the people and to expand the national economy.
In furtherance of this policy, the Government shall encourage and assist in the establishment of a system of co-operative banks all over the country which shall provide banking facilities...
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Republic Acts
An Act To Provide The General Basic Cooperative Law And To Consolidate And Amend Existing Laws On Non-Agricultural Co-Operatives In The Philippines With Special Provisions For Given Types Of Co-Operatives.
Republic Act No. 2023
Summary of Republic Act No. 2023 (Philippine Non-Agricultural Co-operative Act):
Preliminary Provisions (Sections 1-7):
- Declares the policy and objectives of promoting co-operatives for economic independence and national development.
- Defines key terms like "co-operative", "co-operative basis", "federation of co-operatives", "member", "regulations", "by-laws", "board", and "Administrator".
- Covers existing non-agricultural co-operatives registered under previous laws.
- Allows exemptions for certain types of co-operatives from provisions of the Act.
- Declares that the Corporation Law does not apply to co-operatives.
Administrator (Section 8):
- The Administrator of the Co-operatives Administration Office under the Department of Commerce and Industry is charged with administering the Act.
- Qualifications for the Administrator and Assistant Administrators are specified.
Organization and Registration (Sections 9-25):
- Lists the purposes for which a co-operative can be registered, including thrift, credit, production, marketing, housing, insurance, and socio-economic development.
- Declares that co-operatives complying with the Act are not considered conspiracies or restraints of trade.
- Outlines the process for organizing and registering a co-operative, including survey, application, and approval by the Administrator.
- Covers amendment of articles of incorporation and by-laws, change of liability, and division or transfer of co-operatives.
- Provides for registration of federations of co-operatives at provincial and national levels.
Membership (Sections 26-33):
- Specifies qualifications for membership, including voluntary and open membership.
- Covers liability of members, withdrawal and expulsion, nomination of beneficiaries, and disposal of sums due to withdrawing members.
- Prohibits claims against the co-operative after payments and transfers made in accordance with the Act.
Administration (Sections 34-48):
- Vests final authority in the general assembly of members or delegates.
- Outlines provisions for annual and special general assemblies, voting rights, board of directors, officers, and committees.
- Covers qualifications, removal, and filling of vacancies for directors and committee members.
- Prohibits contracts for profit between directors/officers and the co-operative.
- Specifies duties, responsibilities, and liabilities of directors, officers, and committee members.
- Grants the Administrator certain administrative powers, including directing amendments to by-laws, opening membership, removing officers, and regulating fluid resources.
Duties, Responsibilities and Privileges of Co-operatives (Sections 49-67):
- Requires co-operatives to maintain an official address, records, accounts, and annual reports.
- Grants exemptions from taxes, fees, and certain legal requirements for co-operatives meeting specified asset limits.
- Provides privileges like free notary services, registration, legal representation, and government deposits.
Capital, Property and Funds (Sections 68-78):
- Covers capitalization, sources of funds, share capital limits, interest on capital, transferability of shares, and investment of funds.
- Allows government aid through loans, share purchases, and financial assistance.
- Provides for revolving capital through deferred patronage refunds or authorized deductions.
Allocation and Distribution of Savings (Sections 79-85):
- Outlines computation of savings, which are not considered profits.
- Requires setting aside portions of net savings for reserve fund, educational fund, and other funds.
- Regulates distribution of remaining savings as interest on capital and patronage refunds.
- Covers treatment of patronage refunds for members, subscribers, and non-members.
Audit, Inquiry and Inspection (Sections 86-93):
- Mandates annual audit by the Administrator or authorized auditor.
- Empowers the Administrator to conduct inquiries and inspections into co-operatives.
- Outlines procedures for audit reports, inquiries, inspections, and rectification of defects.
Supersession (Section 94):
- Allows the Administrator to dissolve and reconstitute the board or committee if not functioning properly, and appoint interim management.
Liquidation and Arbitration (Sections 95-103):
- Specifies grounds for the Administrator to order liquidation of a co-operative.
- Covers appointment of liquidator, powers during liquidation, and cancellation of registration.
- Provides for arbitration of civil controversies by the Administrator or nominees.
- Grants the Administrator power to direct payment of dues owed to co-operatives.
Surcharge and Attachment of Property (Sections 104-105):
- Allows the Administrator to order compensation for losses due to misconduct or negligence.
- Permits attachment of property to prevent disposal intended to defeat orders.
Regulations (Section 106):
- Authorizes the Administrator to prescribe regulations to implement the Act, subject to approval.
Offenses and Penalties (Sections 107-112):
- Prohibits unauthorized use of the word "co-operative" and imposes penalties.
- Specifies offenses by officers/members and corresponding penalties.
- Covers non-performance of obligations and certain prohibited acts.
- Requires Administrator's sanction for prosecutions, except for criminal acts.
Special Provisions Relating to Co-operative Banks (Sections 113-126):
- Outlines applicability, definitions, objects, registration, names, membership, governance, budget control, lending, capital, audit, distribution of savings, and privileges specific to co-operative banks.
Special Provisions Relating to Co-operative Wholesale Societies (Sections 127-143):
- Covers applicability, objectives, registration, names, membership, voting, governance, management, budget control, borrowing, business terms, capital, warehouse financing, audit, distribution of savings, liquidation, and privileges specific to co-operative wholesale societies.
Miscellaneous (Sections 144-154):
- Specifies methods for recovery of money, enforcement of orders, maintenance of co-operative register, and validity of acts despite defects.
- Requires notice to Administrator in suits against co-operatives.
- Covers composition of National Co-operative Union board, review and revision of orders, repeals, appropriations, and reporting to Congress.
- Sets the effectivity date of the Act.
Preliminary Provisions (Sections 1-7):
- Declares the policy and objectives of promoting co-operatives for economic independence and national development.
- Defines key terms like "co-operative", "co-operative basis", "federation of co-operatives", "member", "regulations", "by-laws", "board", and "Administrator".
- Covers existing non-agricultural co-operatives registered under previous laws.
- Allows exemptions for certain types of co-operatives from provisions of the Act.
- Declares that the Corporation Law does not apply to co-operatives.
Administrator (Section 8):
- The Administrator of the Co-operatives Administration Office under the Department of Commerce and Industry is charged with administering the Act.
- Qualifications for the Administrator and Assistant Administrators are specified.
Organization and Registration (Sections 9-25):
- Lists the purposes for which a co-operative can be registered, including thrift, credit, production, marketing, housing, insurance, and socio-economic development.
- Declares that co-operatives complying with the Act are not considered conspiracies or restraints of trade.
- Outlines the process for organizing and registering a co-operative, including survey, application, and approval by the Administrator.
- Covers amendment of articles of incorporation and by-laws, change of liability, and division or transfer of co-operatives.
- Provides for registration of federations of co-operatives at provincial and national levels.
Membership (Sections 26-33):
- Specifies qualifications for membership, including voluntary and open membership.
- Covers liability of members, withdrawal and expulsion, nomination of beneficiaries, and disposal of sums due to withdrawing members.
- Prohibits claims against the co-operative after payments and transfers made in accordance with the Act.
Administration (Sections 34-48):
- Vests final authority in the general assembly of members or delegates.
- Outlines provisions for annual and special general assemblies, voting rights, board of directors, officers, and committees.
- Covers qualifications, removal, and filling of vacancies for directors and committee members.
- Prohibits contracts for profit between directors/officers and the co-operative.
- Specifies duties, responsibilities, and liabilities of directors, officers, and committee members.
- Grants the Administrator certain administrative powers, including directing amendments to by-laws, opening membership, removing officers, and regulating fluid resources.
Duties, Responsibilities and Privileges of Co-operatives (Sections 49-67):
- Requires co-operatives to maintain an official address, records, accounts, and annual reports.
- Grants exemptions from taxes, fees, and certain legal requirements for co-operatives meeting specified asset limits.
- Provides privileges like free notary services, registration, legal representation, and government deposits.
Capital, Property and Funds (Sections 68-78):
- Covers capitalization, sources of funds, share capital limits, interest on capital, transferability of shares, and investment of funds.
- Allows government aid through loans, share purchases, and financial assistance.
- Provides for revolving capital through deferred patronage refunds or authorized deductions.
Allocation and Distribution of Savings (Sections 79-85):
- Outlines computation of savings, which are not considered profits.
- Requires setting aside portions of net savings for reserve fund, educational fund, and other funds.
- Regulates distribution of remaining savings as interest on capital and patronage refunds.
- Covers treatment of patronage refunds for members, subscribers, and non-members.
Audit, Inquiry and Inspection (Sections 86-93):
- Mandates annual audit by the Administrator or authorized auditor.
- Empowers the Administrator to conduct inquiries and inspections into co-operatives.
- Outlines procedures for audit reports, inquiries, inspections, and rectification of defects.
Supersession (Section 94):
- Allows the Administrator to dissolve and reconstitute the board or committee if not functioning properly, and appoint interim management.
Liquidation and Arbitration (Sections 95-103):
- Specifies grounds for the Administrator to order liquidation of a co-operative.
- Covers appointment of liquidator, powers during liquidation, and cancellation of registration.
- Provides for arbitration of civil controversies by the Administrator or nominees.
- Grants the Administrator power to direct payment of dues owed to co-operatives.
Surcharge and Attachment of Property (Sections 104-105):
- Allows the Administrator to order compensation for losses due to misconduct or negligence.
- Permits attachment of property to prevent disposal intended to defeat orders.
Regulations (Section 106):
- Authorizes the Administrator to prescribe regulations to implement the Act, subject to approval.
Offenses and Penalties (Sections 107-112):
- Prohibits unauthorized use of the word "co-operative" and imposes penalties.
- Specifies offenses by officers/members and corresponding penalties.
- Covers non-performance of obligations and certain prohibited acts.
- Requires Administrator's sanction for prosecutions, except for criminal acts.
Special Provisions Relating to Co-operative Banks (Sections 113-126):
- Outlines applicability, definitions, objects, registration, names, membership, governance, budget control, lending, capital, audit, distribution of savings, and privileges specific to co-operative banks.
Special Provisions Relating to Co-operative Wholesale Societies (Sections 127-143):
- Covers applicability, objectives, registration, names, membership, voting, governance, management, budget control, borrowing, business terms, capital, warehouse financing, audit, distribution of savings, liquidation, and privileges specific to co-operative wholesale societies.
Miscellaneous (Sections 144-154):
- Specifies methods for recovery of money, enforcement of orders, maintenance of co-operative register, and validity of acts despite defects.
- Requires notice to Administrator in suits against co-operatives.
- Covers composition of National Co-operative Union board, review and revision of orders, repeals, appropriations, and reporting to Congress.
- Sets the effectivity date of the Act.